Indian iron ore and steel industry has been going through a tough phase on tighter iron ore supplies, especially in the state of Odisha which observed the auctioning of key mining leases. The exchange of hands, logistical constraints and the pandemic created strong headwinds curtailing iron ore production in the state. With just 11 auctioned iron ore mining leases being able to resume production, out of 19 mines, till Nov’20, Odisha iron ore fines prices have shot up by over three-fold in the last six months.
SteelMint conducted a webinar on 07 Jan’21 and the panellists were Dr. Umesh Chandra Jena, Joint Director of Mines, Govt. of Odisha, India, Mr. Ramakrishna Chinnamsetty, Head of Mining and Business Development AM/NS India, Mr. Ranjan Nayak – COO, Odisha, JSW Steel, India, Ms. Nishtha Mukerjee, GM Iron Ore & Scrap, SteelMint, India, Mr. Arun Bhatt, Editor, SteelMint, India.
Key takeaways are as mentioned below:
- 11 of the 19 auctioned iron ore mining leases had resumed production till Nov’20 – Odisha’s iron ore production has suffered a setback after 19 iron ore auctioned mining leases changed hands. But gradually auctioned mining leases have resumed and ramped up production in H2 CY20, with JSW Steel, AM/NS India, Kashvi, Serajuddin mines being the frontrunners.
- Odisha’s iron ore production expected to cross 100 mn t in FY’21 – India’s largest iron ore producing state- Odisha is expected to achieve 100-110 mn t iron ore in FY’21, against the production of 145 mn t in the last fiscal, said Mr UC Jena Joint Director of Mines. So far in this fiscal (Apr-Dec’20), Odisha produced around 72 mn t iron ore, which is a 30% deficit on y-o-y basis. However, in the case of dispatches deficit seen is just 10-12% considering the inventories of auctioned mining leases.
- Odisha govt to invite bids for six iron ore blocks by end Jan’21 – Odisha govt is likely to invite bids for auction of six iron ore blocks by the end of Jan’21, said Mr UC. Out of the six blocks which will be put up for auction, five would be virgin iron ore blocks, he added.
- Odisha govt allots two non-operationalized mining leases to OMC – The Jilling-Langalota and Guali iron ore mines in Odisha have been allocated to Odisha Mining Corporation (OMC) by the state govt. The two mines, with combined capacity of around 12 mn t, had won high premiums at the mineral auctions held in Jan’20. However, the new lessees could not commence production at the mines. The allocation of the mines to OMC could boost supplies. However, govt of Odisha expects resumption of production from these mines in next fiscal.
- Evacuation of iron ore still a concern in Odisha – Infrastructure for roads, logistics is still a concern for iron ore movement in Odisha however govt is working on procedures for improvement including easing of stacking norms and drone mechanism which may facilitate the material movement. Both JSW & AMNS are investing heavily on movement of ore through slurry pipeline to overcome this bottleneck.
- JSW Steel eyes production of 13.5 mn t iron ore in Odisha in FY’21 – JSW Steel targets to produce around 13.5 mn t iron ore this fiscal from its four mines in Odisha that it won in auctions, shared Mr Ranjan Nayak. The company is also intending to enhance the production limits of three of its mining leases in the coming two to three years.
- ROM sales by JSW in merchant market awaits clarity on IBM prices – Steel major JSW had scheduled e-auction of run of mine (ROM) from its Nuagaon and Jajang iron ore mines in Odisha in the month of Dec’20. The miner withdrew the auction owing to legal hurdles. The company is now awaiting average sale price publication of ROM by IBM to auction the material which is under consideration with the govt. of India, highlighted Mr Ranjan Nayak.
- AM/NS India likely to resume mining operations at Sagasahi block shortly – AM/NS India received forest clearances for resuming mining operations at Ghoraburhani Sagasahi iron ore mine block in Dec’20 and the lease execution is expected to be done in Jan’21, highlighted Mr Ramakrishna. The mine has EC limit of 7.16 mn t pa.
JSW, AM/NS and Jt. Director Mining Govt. Of Odisha were optimistic about the future and were unanimous in accepting the fact that the worst was over. They exuded confidence about surmounting their challenges and creating new benchmarks.
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